BEFORE THE UTAH STATE TAX COMMISSION
In Re: ) ORDER SETTING ASIDE
: DEFAULT AND
XXXXX, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
) AND FINAL DECISION
) Appeal No. 93-0558
: Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Petitioner failed to appear and a default was subsequently entered.
Later, XXXXX contacted the Commission and explained the reason he did not attend the hearing as scheduled.
Lisa L. Olpin, Presiding Officer, allowed Petitioner to present his case in a formal hearing on XXXXX. Present and representing the Petitioners were XXXXX and certified public accountant XXXXX.
Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is individual income tax.
2. The period in question is the year XXXXX.
3. With the assistance of their certified public accountant XXXXX, Petitioners filed their XXXXX personal income tax return on XXXXX with the extension request and paid the tax amount in full ($$$$$).
4. The Tax Commission later assessed a penalty in the amount of $$$$$ for failing to pay a prepayment for the year in question. Interest in the amount of $$$$$ was added.
5. The Commission added another ten percent penalty ($$$$$) when Petitioners failed to pay in full by the due date.
6. Petitioners are requesting a waiver of the penalty and interest assessments at this time.
7. Petitioners did not have the information necessary for filing their XXXXX return on time, so they requested the extension while awaiting income statements.
8. They did not prepay the tax with the extension request because; 1) they did not know how much income they would have to report for XXXXX; and 2) the XXXXX tax amount paid was unusually high ($$$$$) and would have been impractical for Petitioners to pay again in XXXXX.
9. Petitioners' accountant testified that he has had other cases like this one where it was too difficult to estimate how much tax would be owed for a given year. The taxpayer does not prepay due to the uncertainty and the fact that the previous year's tax amount was extraordinarily high. He said that a penalty is assessed on rare occasion.
10. Mr. XXXXX testified that he paid the interest when the return was filed, acknowledging that this was an appropriate assessment. Tax Commission records, however, show that Petitioners had paid only the tax amount for the year in question at the time of filing. The interest payment was not received until XXXXX.
CONCLUSIONS OF LAW
The Tax Commission is granted the authority to waive, reduce, or compromise penalties and interest upon a showing of reasonable cause. (Utah Code Ann. '59-1-401(8).)
DECISION AND ORDER
In this case, Petitioners should have at least made some attempt at a reasonable ballpark estimate of what the tax amount would be for XXXXX rather than not prepay any amount at all.
Tax Commission records show that for the years XXXXX and XXXXX Petitioners paid $$$$$ and $$$$$ respectively in taxes. Prepaying one of these amounts would have been reasonable under the circumstances.
Based upon the foregoing, the Tax Commission finds that sufficient cause has not been shown which would justify a waiver of the $$$$$ prepayment penalty. The second ten percent penalty ($$$$$) is waived, however, in light of the fact that it was assessed while this case was in appeals status. Interest is not waived. It is so ordered.
DATED this 21st day of January, 1994.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer
NOTICE: You have twenty (20) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. ''63-46b-13(1), 63-46b-14(3)(a).